Setting aside the Nigeria Upstream Petroleum Regulatory Commission’s (NUPRC) earlier stance disapproving the sale and asset purchase of ExxonMobil by Seplat Energy, the reverse is now confirmed by Seplat Energy, following a notice it received from the Presidency approving the transaction.
President Muhammadu Buhari is said to have weighed-in in favour of Seplat Energy to proceed to the final phase of arrangements to purchase the shallow offshore assets of America’s super major in Nigeria.
The transaction, which was on course for conclusion, was abruptly halted by the NNPC’s belated argument to exercise the right of first refusal.
In a statement released on Tuesday, August 9, Seplat Energy announced that President Muhammadu has finally consented officially to its request asking for permission to negotiate and purchase the ExxonMobil assets in Nigeria.
The full text of the statement says: ” Seplat Energy is pleased to announce that it has received a letter from the Hon. Minister of State for Petroleum Resources notifying Seplat that HE. President Muhammadu Buhari has graciously approved the cash acquisition of the entire share capital of Mobil Producing Nigeria Unlimited from its shareholders, Mobil Development Nigeria Inc and Mobil Exploration Nigeria Inc, being entities of Exxon Mobil Corporation registered in Delaware, USA.”
“The Board and Management of Seplat Energy gratefully acknowledge His Excellency, President Muhammadu Buhari, for his Ministerial Consent to this historic acquisition of MPNU’s entire share capital,” the statement ended.
Recall that EnergyDay reported the simmering controversy over the sale of the asset following conflicting instructions from the regulatory agency responsible for matters concerning upstream oil transactions, the Nigeria Upstream Regulatory Agency, which maintained its stance disapproving the transaction, moments after a Presidential spokesperson, Femi Adesina, had expressed President Buhari’s pleasure of assent.
This transaction marks one of the momentous experiences in Nigeria’s hydrocarbon development at a time when the country was a bad sell to the global oil investment public.
The major highlight and sequence of the transaction in summary is further explained by Seplat Energy stating that it is a wholly Nigerian subsidiary of Seplat Energy Plc and has entered into a Sale and Purchase Agreement to acquire the entire share capital of MPNU for a purchase price of $1,283 million plus up to $300 million in contingent consideration.
The transaction encompasses the acquisition of the entire offshore shallow water business of ExxonMobil in Nigeria, which is an established, high-quality operation with a highly skilled local operating team and a track record of safe operations, producing substantial crude and gas volumes.
Nigeria is expected to increase crude production from the assets to 146,000bpd, while gas reserves will increase to 650MMbbl, leaving a potential recovery of nearly 3 billion scf.
The transaction is seen as supporting Nigeria’s energy transition and the objectives of the Petroleum Industry Act. It is also the first transaction to be announced since the Nigerian government’s recently ratified Petroleum Industry Act (“PIA”), and supports its key objectives.
Seplat Energy said it is fully committed to working with the Nigerian government to bring these strategically important national assets fully into Nigerian ownership alongside NNPC Limited.